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In a recent interview with CNN, the $20 Billion BP Claims Escrow Fund administrator Kenneth Feinberg said that the new and independent Gulf Coast Claims Facility has “got to get the claims out quicker, we’ve got to get them out with more transparency so that claimants understand what the status is of their claim”. When asked about a claim made by a Louisiana fisherman who has made with the current BP claims process, Mr. Feinberg said “I can’t speak for BP. I’m running an independent facility.” and that “Whatever it takes, these individuals and businesses must get paid.”
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Earlier this week, BP announced that it would be applying stricter standards to its oil spill claims process moving forward. For future BP claims to be eligible for payment, victims will be required to submit more documentation to the claims center, including tax returns, pay stubs or trip tickets. BP also announced that there will be no more $1000 dollar “good faith payments” after July. This means that, under the current claims system, claimants must submit all of their income documentation before any payment will be made. We will make every effort to provide you with information about the upcoming changes to the claims process as it becomes available from the Gulf Coast Claims Facility.
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In an interview with Fox News Sunday, BP Claims Fund Administrator Kenneth Feinberg stated that he would work as an independent voice despite being hired by the Obama Administration and being compensated by BP. In his interview, Mr. Feinberg said “I work for the people in the Gulf Region” and “I answer to neither BP nor the Administration”, and that “The $130 million that has been paid out (by BP to the victims) so far is not part of the $20 Billion”.
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The New York Times published a very interesting article yesterday that outlines where the money has gone to so far from the current BP Claims Fund and outlines some of the changes that are needed in the new, government administered claims fund.
To date, more than 80 percent of the claims fund money has gone to self employed workers. This includes boat captains, shrimpers, oystermen and waterfront rental property owners who can easily show that the Gulf Oil Spill has affected their profit. Far less larger businesses have been compensated on their claims because of the complexities of proving their losses.
It remains unclear how homeowners will be compensated for losses in real estate values resulting from the spill. At a hearing before congress last week, BP Claims Fund Administrator Kenneth Feinberg stated that “On the one hand, those people are suffering; they deserve some help,” and “On the other hand, there’s not enough money in the world to pay every homeowner wherever they live on the Gulf Coast who says my property is down because of the oil spill.”
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In an interview with New Orleans City Business, BP Claims Fund Administrator Kenneth Feinberg offered insight on how the people and businesses affected by the Gulf Oil Spill may be compensated by the $20 Billion Fund. According to the article, Feinberg is considering a two phase process for the claims process.
During the initial claims phase, which would last until the oil well is capped, affected individuals and businesses could receive lump-sum payments from the fund to cover between three and six months worth of losses. Accepting this initial payment from the fund would not waive the claimants right future fund claims or to sue BP in the future. Mr. Feinberg has also said that initial lump-sum payments from the fund will be expedited and will not have a predetermined limit.
Once the well is capped and the flow of oil has stopped, the second phase of the claims process would begin. In this phase, individuals and businesses filing claims would receive payments for all losses in the future and would waive their right to file future claims.
More details about how the fund will operate will be finalized soon. We will keep this column updated as the details about the new BP Clams Fund process is made public.
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On Wednesday, June 16th 2010, BP agreed to set up a $20 billion dollar claims fund to help the individuals and companies who have been affected by the Deepwater Horizon Oil Spill in the Gulf of Mexico. The Gulf Coast Oil Disaster has now become the biggest spill in American History and the largest accidental spill in human history.
The $20 billion fund that has been created will be paid out over the next three and a half years using the following schedule:
- $3 billion paid out in the third quarter of 2010
- $2 billion paid out in the fourth quarter of 2010
- $1.25 billion per quarter thereafter until fund is depleted
BP has stated that the fund will be available satisfy “legitimate claims” and that fines and penalties will be excluded from the fund obligations.
BP Fund claims will be administered by the Independent Claims Facility or “ICF”. President Obama has appointed Ken Feinberg, administrator of the 9-11 fund, to preside over the ICF and the BP claims process. BP has stated that the creation of this fund does not represent a cap on it’s own liabilities related to the spill.
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